Liz: Tell me about the term ‘true cost accounting’, and what this specifically means for food and farming?

Patrick: ‘True cost accounting’ is a term developed to describe how we put a cost on the environmental and public health impacts of our current global industrialised farming and food production system. It seeks to make visible the real cost of our food by putting a value on the natural ‘capital’ that is used, and assessing the positive or negative impacts on environmental and human health.The ideas behind it have been developing over the last ten years and there is now quite a bit of research assessing how much the damage to nature caused by industrial farming is costing us, and on the other side of it, what the monetary value is of the ‘ecosystem services’ that nature provides to us ‘free of charge,’ so to speak. Researchers are also beginning to look at social and public health costs and benefits as well. At the moment, these costs and benefits are not factored into the price of our food, so both our farming and food markets are skewed in favour of the least sustainable method of production, or those that cause the most damage to the environment and public health. And because sustainable producers are not rewarded for the benefits they deliver to society, this has created a perverse situation where sustainably produced food is more expensive than its intensively produced counterpart.

Liz: Can you share some examples of ways in which consumers don’t currently pay the true cost of their food?

Patrick: A good example is the cost of cleaning pesticide and nitrate residues out of our drinking water. That’s part of what would be included in a true cost account of conventional food production. This cost is borne by consumers when they pay their water bill, and that payment subsidises the production of the crops on which the pesticides are used. The farmer or food producer does not pay the cost of cleaning the water, so that food is cheaper than it would be if they had to pay for the pollution created by the pesticides. Pavan Sukhdev, who will be speaking at the SFT’s upcoming conference True Cost Accounting in Farming and Food, has given another example of this in terms of nature’s ‘ecosystem services’. The Amazon rainforest is critical in the production of rain for the La Plata Basin, the main agricultural region in South America – without the rain, the region would cease to be viable for agriculture. The economic value of this in terms of the crops sales generated is $240 billion dollars a year. So the Amazon has an economic role as well as ecological role in that food system. These kinds of costs and values must be reintegrated into the price of the food we eat. At present, there is an almost total absence of pricing that reflects this ‘true cost accounting.’

Liz: What sort of policy and economic changes are we going to need in order to see improvements?

Patrick: Moving towards a more globally sustainable food production system is critical. Our present system of food production and distribution is built on a range of practices that are unsustainable as we near the tipping points of climate change, ecosystem collapse and rising obesity levels. It privileges these unsustainable practices by redistributing the costs of their damaging impacts from the private sector to the public sector.If we could place a clear monetary value on the ‘externalities’ or impacts, this would enable the introduction of a range of taxes and incentives that could potentially ensure, that in the future, farmers and food producers who cause damage to the environment and human health would be penalised, whilst those who protect the environment and promote human health would be properly rewarded for these beneficial outcomes. This would rebalance our food system and ensure that sustainable food production was more economically viable than unsustainable food production.Without the introduction of ‘true cost accounting’ into our current global food system, moving sustainable practice in food and farming into the mainstream will be impossible. We need to make visible the real cost of our food.

Liz: When 500,000 people in the UK are using food banks, is it right to be talking about a system that could potentially increase the cost of food?

Patrick: We need to increase public awareness of these distortions in the economics of our food systems as a point of urgency. The idea that the introduction of ‘true cost accounting’ into our food system will increase the cost of food is really a red herring. We have been living in a false economy of food production and it’s time to turn things around for both the sake of the planet and for ourselves.The cost of food is rising due to global demand, as Philip Clarke, the CEO of Tesco [the UK's largest supermarket chain], admitted earlier this year. The UN has predicted a 40% rise in the cost of food over the next decade. With the pressure on food production increasing, against the backdrop of climate change and the rising cost of fossil fuels, it is important to push for changes in our food system that will prevent prices rising as much as they might otherwise do. Ensuring our food systems are sustainable could help mitigate the rising cost of food by localising food production, encouraging regional diets, and eliminating the onerous cost of fossil fuel-based fertilisers and GM pesticides and herbicides that many conventional farmers have become dependent upon. When we talk about True Cost Accounting, it is easy to focus only on the associated costs, however we also need to consider the benefits of sustainable farming systems. Rewarding beneficial outcomes, such as farming systems that build soil fertility, or sequester atmospheric carbon back into the earth, would mean that the cost of sustainably produced food – that also tends to be healthier for us to eat – would actually be reduced.

Read the remainder of Hearle’s Q&A with Holden here, including tips for consumers who want to make a difference and eat better food for less.

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